BEIJING, May 19 (Reuters) - China’s scrap metal importers expect disruptions in shipments to start this month because of uncertainty surrounding new scrap restrictions starting in July, depriving the world’s biggest copper consumer of a crucial source of the metal.

Starting on July 1, China will restrict high-grade Category 6 copper scrap, as well as aluminium and steel scrap, an extension of an earlier ban that started this year on Category 7 scrap, which has less metal content.

From then, scrap metal importers into China will have to show they have the capacity to manufacture the imported scrap into refined metal or semi-finished products such as copper cathode or rods in order to receive licences and quotas from the Ministry of Ecology and Environment, according to five sources familiar with the process..

China, the world’s biggest metals consumer, imported 5.34 million tonnes of scrap metal last year, down a third from 2017, according to customs data, as an environmental campaign against solid waste gained momentum.

On a copper contained basis, China’s scrap copper imports last year accounted for almost 10 percent of the country’s total copper consumption of 13.05 million tonnes, according to Reuters calculations using data from Refinitiv, customs and China’s industry ministry.

Scrap professionals expect the Category 6 restrictions to cause further disruptions to trade flows and supply after the Sino-U.S. trade war saw Japan overtake the United States - and Hong Kong - to become China’s biggest copper scrap supplier last year.

“We will see at least some short-term disruptions on the scrap trade flows in June and July since the government has announced taking on some trials this month. It’s not crystal how this quota system will work,” Chris Wu, a senior copper consultant at CRU in Beijing, said last week during LME Asia week in Hong Kong.

Chinese copper scrap importer HKM expects China’s scrap imports to fall by 40% to 50% in May and June. The company imports about 10,000 tonnes per month of copper scrap into China, using half of that at its own copper rod plant in Jiangxi province.

HKM Executive Director Gary Chen said the uncertainty around the July 1 changes will keep importers from booking shipments that could arrive after the date.

“People are not sure of the policy from July 1, so they don’t want to make any long-distance orders now,” he said. Chen is taking the further precaution of setting a deadline of June 5 for any cargoes to arrive at port, in order to have enough time to clear customs.

Chen is “very confident” HKM will receive a licence since it has the Jiangxi plant and has invested in environmentally-friendly technology. But he is concerned that his customers may find their applications rejected if they cannot demonstrate a track record of importing.

A scrap source with operations in Zhejiang said his company had already “paused” imports but might use an existing copper cathode plant or a new plant it is building to help it acquire a licence.

Long Ziping, the chairman of Jiangxi Copper , one of China’s biggest copper firms, told Reuters last month that it would be “no problem” getting a scrap import licence since the company can show it is a refined copper producer.

Even so, Jiangxi Copper is planning a plant in Malaysia that will process scrap into refined copper, for possible onward shipment to China.

Under current solid waste classifications, all scrap metal imports will be banned in China by end-2020, but lobbying is under way to have high-grade material re-categorised to a resource that could still be allowed in.